Partial Settlement Approved in GLGI Charitable Donation Class Action

Waddell Phillips Professional Corporation
·2-min read

TORONTO, Oct. 26, 2020 (GLOBE NEWSWIRE) -- The law firms of Waddell Phillips Professional Corporation and Klein & Schonblum, Associates today announced that the Ontario Superior Court of Justice has approved a settlement between the Plaintiffs and three of the defendants in the Global Learning Gifting Initiative Charitable Donation Program class action lawsuit (the “Action”).

The GLGI Gift Program was a complex leveraged charitable donation tax scheme that operated from 2004 to 2014. The Plaintiffs allege that the promoter of the Gift Program, Global Learning Group Inc., led approximately 40,000 participating Canadian taxpayers to believe that the Gift Program was a legitimate charitable enterprise, paying approximately $300,000,000 in what they thought were charitable donations. In 2015, the Tax Court of Canada found that the Gift Program was a ‘sham’ and that GLGI and its accomplices took approximately 90% of the cash donations made by the taxpayers, and that the trust structure of the Gift Program was invalid.

On August 19, 2020, Robert Kepes and Morris & Morris LLP were added as defendants to the Action by court order. The court certified the claim against these Defendants as well as Morris, Kepes & Winters LLP (together, the MKW Defendants), and approved a settlement of the Action against the MKW Defendants.

Under the terms of the settlement, the MKW Defendants paid $1,450,000 and agreed to co-operate with the Plaintiffs in the ongoing litigation of the class action against the remaining Defendants. In exchange, all of the Class’ claims against the MKW Defendants have been released. The liability of the remaining Defendants will exclude whatever proportion of fault (if any) that the Court finds was the responsibility of the MKW Defendants.

There will be no distribution to the Class from this settlement. The settlement funds will be used to repay disbursements, pay a levy to the Class Proceedings Fund, and pay legal fees to Class Counsel.

The Plaintiffs continue to pursue the Action against ten other Defendants. The balance of the settlement funds will be used for the ongoing prosecution of the Action against the remaining Defendants.

Additional information about this case is available at www.glgiclassaction.ca.

Contact:

Waddell Phillips Professional Corporation
Barristers
36 Toronto Street, Suite 1120
Toronto, ON M5C 2C5
reception@waddellphillips.ca
647-261-4486 or 1-888-684-5545 (toll-free)

Klein & Schonblum, Associates
Barristers & Solicitors
2300 Yonge Street, Suite 2901
Toronto, ON M4P 1E4
glgi@ksalaw.com
416-480-0221